Add training workflow, datasets, and runbook

training_data/curated/text/85b52d09853d9eb1db9b737c9d5300ba48a894cd50371acf7680e29d86b0d4d0.txt

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+When Delta Neutral Isn’t Direction
+Indifferent
+Many dynamic-volatility option positions, such as the risk reversal, have
+vega risk from potential IV changes resulting from the stock’s moving. This
+is indirectly a directional risk. While having a delta-neutral position hedges
+against the rather straightforward directional risk of the position delta, this
+hidden risk of stock movement is left unhedged. In some circumstances, a
+delta-lean can help abate some of the vega risk of stock-price movement.
+Say an option position has fairly flat greeks at the current stock price. Say
+that given the way this particular position is set up, if the stock rises, the
+position is still fairly flat, but if the stock falls, short lower-strike options
+will lead to negative gamma and vega. One way to partially hedge this
+position is to lean short deltas—that is, instead of maintaining a totally flat
+delta, have a slightly short delta. That way, if the stock falls, the trade
+profits some on the short stock to partially offset some of the anticipated
+vega losses. The trade-off of this hedge is that if the stock rises, the trade
+loses on the short delta.
+Delta leans are more of an art than a science and should be used as a
+hedge only by experienced vol traders. They should be one part of a well-
+orchestrated plan to trade the delta, gamma, theta, and vega of a position.
+And, to be sure, a delta lean should be entered into a model for simulation
+purposes before executing the trade to study the up-and-down risk of the
+position. If the lean reduces the overall risk of the position, it should be
+implemented. But if it creates a situation where there is an anticipated loss
+if the stock moves in either direction and there is little hope of profiting
+from the other greeks, the lean is not the answer—closing the position is.